by Andy Peters
This past Wednesday I was able to attend another fascinating quarterly statistics presentation on the metro Atlanta real estate market. The bull is definitely back in the market. Amongst many eyebrow raising statistics, there was one that I felt captured what we’re experiencing right now better than anything else. Believe it or not, over 30% of the properties selling today are going over the list price. Homes are selling in 45 days on market and at 95% sales/original list price.
Median sales price was up 39.6% from the same period last year. You have to be careful to note though that prices are not up 39.6%, which I’m sure will be misconstrued at times by the local media. This skyrocketing stat was markedly fueled by a shortage in the under $200,000 and especially under $100,000 market. With less inventory below $200,000, we really had no place to go but up because that same price range had been sobering the median sales price for years. Having said that, the displacement effect caused by “eating” so many homes on the lower end has now crossed over on the upper end, and that’s good news as a whole. Overall supply has fallen by 22% from this time last year. Check out how the median sales price has changed through the years in the chart below. Notice the irregularity of the 2013 graph with the red square data points. Most every other year followed a similar pattern, but 2013 has broken out unusually.
Sometimes it’s hard to realize where you are without looking at where you’ve come from. Just take a look at the line graph below which shows the month’s worth of supply of listings going back to 2007. The red lines represent the actual inventory, and the smaller gray lines represent the volume of homes sold. You’ll notice that the amount of homes sold has stayed rather steady while the inventory has nosedived, which has led to the significant reduction in the months worth of inventory. As reported in posts before, the market is in trouble in a very eery way if this inventory doesn’t start picking up. As a result, prices will continue to rise to unsustainable levels (as we’re seeing already in the bottom image) and appraisals will continue to lag behind the artificially high market prices. The only thing that can cure the trouble is more listings.
Taking a little closer look, you’ll see that we currently have a 3 month supply of inventory. Under a 6 month supply, we consider things to be a “Seller’s Market.” Still feels weird saying that coming from where we’ve been over the last 4-5 years. So, what does this mean for you? If you’re a Seller, you’re riding a wave of increased interest and rising values. I’m meeting with more Sellers now than I ever have. Many of these Sellers were the folks that I talked out of selling in years past or those that can now stomach the improved loss for promise of gain on the other side. If you’re a buyer, you have to realize that there are fewer homes with at least as many buyers as normal fighting you for the best possible listings. As we say on our team, “If it’s good, it’s gone,” and you can’t play hardball on a great piece of property. My suggestion to one buyer recently was if you want this house, you better give them what they want. Lock it up because the one you wait and think on was the one that someone else saw yesterday only to think on and make and offer on today.
Not surprising was the fact that Keller Williams continues to increase their market share, now cornering nearly 20% of the market and over 10% more than the next highest company. The word is certainly out about this technology loving, well educated, prepared, and contagious culture.
As a team, The Peters Company is having our best year ever thanks to our loyal clients. We have successfully closed over 70 transactions now with an additional 20+ transactions on the books set to close throughout the remainder of the year. Our sold listings, which total over 30 now year to date, are selling for over 99% of their original sales price in 9 days on the market on average. With so little homes on the market, you want to make sure your home sells before the others and you get what you want. With many homes selling over the list price, you need an agent with experience facilitating such a circus so that you can maximize your opportunity. On the buy side, Jennie, Russell and myself have found properties for our buyer clients before they ever hit the market. We’re helping buyers win in multiple offer situations on competitive properties, and we’re doing all this while following a time tested process, sharing, explaining and guiding all the way. You’ll love working with us! Call us today at 404-419-3619.